Jan 10, 2023 14:43
West Texas Intermediate, or WTI, is down during the Asian session, losing about 0.4% at the time of writing amid optimism that China's demand will increase after the government set new import limitations. However, overnight and at the start of the week, the news provided economic support for its faltering economy, while the US Dollar sank, allowing investors to enter the black gold rise at a lower cost.
China has reopened its borders to international visitors for the first time since March 2020, when it implemented travel restrictions. Elsewhere, China has continued to demolish a large portion of its draconian zero-COVID movement regulations. According to the BBC, incoming travelers will no longer be required to be quarantined, marking a dramatic change in the country's Covid policy as it fights an outbreak. They will continue to require documentation of a negative PCR test conducted within 48 hours after flight.
As a result, oil prices increased early on Monday in anticipation of an uptick in demand from China, as the nation set new import curbs and offered economic support to its faltering economy. Last observed, spot West Texas Intermediate crude was priced at $ 74.57 per barrel.
ANZ Bank analysts explained: "China announced a new batch of import limits, an indication that the world's largest importer is gearing up to meet increased demand."
"The relaxation of COVID-19 regulations has already increased travel. According to the Ministry of Transport, approximately 34.7 million domestic journeys were made on the first day of the Spring Festival travel rush. This is around 40% higher than comparable days in 2022. Approximately 2.1 billion trips are anticipated during the next 40 days. This comes amid tightened supply,'' the analysts added.